Public Ancillary Funds (Public AFs) established on or before 31 December 2011 have been exempt from complying with some of the requirements of the Public Ancillary Fund Guidelines 2011 (Guidelines). However, this transition period expires on 1 July 2015.
It light of this, it is essential that all Public AFs review their governing documents, distributions and investments to ensure they are compliant with the Guidelines by 1 July 2015.
Public AFs could lose their Deductible Gift Recipient (DGR) status and expose themselves to monetary penalties if they are not compliant by 1 July 2015.
The Guidelines can also be enforced through the use of administrative penalties that allow the Commissioner to suspend or remove corporate trustees and charge financial penalties for failures to comply with the Guidelines.
You can find further information on the ATO’s penalty regime here.
Public AFs also have obligations under the Australian Charities and Not-for-Profit Commission Act 2012 (ACNC Act). These obligations include submitting Annual Information Statements to the ACNC. Public AFs should ensure they are complying with their obligations to the ACNC so as not to risk having their charitable status and tax exemptions revoked.